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US Biofuels Update: Ethanol Futures Extend Weekly Losses Amid Weaker Production Levels

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Ethanol futures closed lower on Wednesday, extending a five-day drop of 1.72% amid a drop in weekly ethanol production.

The Nymex November ethanol futures contract settled 1.11% lower on Wednesday at $2.00 per gallon.

The Chicago Board of Trade October soybean oil futures contract settled 1.90% higher at 71.41 cents per pound, while the CBOT November soybean futures contract closed 1.74% higher on Thursday at $13.32 1/4 per bushel.

Jack Scoville, Price Futures analyst, said the traders are reacting to escalating war activity that is pushing up crude oil.

"Higher crude oil prices create additional demand for biofuels," Scoville said.

He added that soybean oil and its soybean feedstock have been supported by the ongoing wars. However, traders have fueled price pressure by liquidating long positions ahead of Friday's US Department of Agriculture's World Agricultural Supply and Demand Estimates Report.

Some analysts expect the USDA to lower its estimates for corn used for ethanol in Friday's data.

On Thursday, the Energy Information Administration reported that for the week ending Sep. 4, US ethanol production averaged 1.10 million barrels per day, down from last week's 1.11 mmb/d and last year's 1.11 mmb/d. The four-week average output of 1.10 mmb/d was above 1.08 mmb/d at the same time last year.

Midwest ethanol production averaged 1.04 mmb/d, compared with 1.05 mmb/d the previous week. Four-week average output was 1.05 mmb/d, compared with 1.03 mmb/d a year ago.

Domestic ethanol inventories ended the week at 25.2 million barrels, compared with 25 mmbbls a week ago, and 22.8 mmbbls a year ago.

What else is happening in Commodities?

Commodities

Baker Hughes Lifts 2026 Guidance on $13.6 Billion Chart Deal, Sees LNG Recovery by 2027

Baker Hughes Company (BKR) lifted 2026 guidance after its $13.6 billion Chart acquisition and sees LNG equipment orders recovering as 2027 approaches, Chief Executive Officer Lorenzo Simonelli said Wednesday at the Barclays Annual Energy Conference.In remarks published on the Baker Hughes website, Simonelli sees improving visibility into an LNG order recovery heading into 2027 and expects stronger execution and cost-saving gains to support meaningful margin expansion.Baker Hughes issued updated 2026 guidance, lifting its revenue forecast to $28.50 billion to $30.30 billion from $26.65 billion to $28.05 billion, reflecting the addition of Chart Industries.The company also raised its adjusted earnings before interest, taxes, depreciation and amortization forecast to $4.88 billion to $5.48 billion from $4.60 billion to $5.10 billion.Baker Hughes expects Chart to generate $1.85 billion to $2.25 billion of revenue and $300 million to $400 million of EBITDA through year-end.Simonelli said Chart should generate 55% to 65% of its segment EBITDA in Q4, reflecting the mid-July closing and typical seasonal weighting.Simonelli added the integration expands Baker Hughes' data center exposure, with the industrial and energy technology segment securing $4.2 billion of related orders since 2025, including $3.2 billion in the first half of 2026, while Chart booked $600 million.Simonelli said LNG order visibility should improve toward 2027 as Baker Hughes integrates Chart, while 2026 free cash flow conversion stands at 40%-45% and Chart backlog could reach $3.6 billion in Q3.

$BKR
Commodities

US Natural Gas Update: Futures Slide to Two-Week Low on Warm Weather Outlook

US natural gas futures extended losses in after-hours trade on Wednesday, falling for the second straight session to a two-week low as forecasts for warmer weather into early fall raised concerns about heating demand heading into winter.The front-month Henry Hub contract and the continuous contract each fell 3.70% to $2.808 per million British thermal units.Milder weather and strong US supplies pressured prices, although a sharp rise in European gas prices offered some support. European natural gas prices climbed to a 3.5-year high as the conflict in the Middle East escalated and European storage levels remained well below historical averages ahead of winter.Barchart, citing The Commodity Weather Group, said US forecasts shifted hotter, with above-average temperatures now expected through Sept. 18.For winter, the hotter outlook reinforces expectations that a Super El Nino weather pattern could bring warmer-than-normal temperatures this fall and winter, potentially reducing gas heating demand.Lower-48 gas demand was 80.2 Bcf/d Wednesday, up 16.4% from a year earlier, Barchart said, citing BNEF. Celsius Energy said average powerburn for the week ended Sept. 8 was 44.4 Bcf/d, up 3.4 Bcf/d from a year earlier. Powerburn on Sept. 8 was 42.0 Bcf/d, up 5.5 Bcf/d year over year.Pinebrook Energy Advisors said temperature patterns are set to normalize considerably, with population-weighted cooling degree days falling after Wednesday and trending lower into the shoulder season.Estimated LNG net flows to US export terminals were 19.8 Bcf/d Wednesday, up 4.8% from the prior week, according to BNEF. Annual maintenance at Cove Point LNG in Maryland, however, could reduce feedgas demand from Appalachia by about 850 MMcf/d for up to three weeks beginning Sept. 19.US production remained strong. Trading Economics put average September output at 112.9 Bcf/d, up from 111.5 Bcf/d in August, a record, and 110.7 Bcf/d in July.Traders are now focused on Thursday's US Energy Information Administration storage report. Gas inventories stood at 3,214 Bcf as of Aug. 28, 160 Bcf, or 5.2%, above the five-year average, according to the EIA.The EIA is expected to report a 28 Bcf injection for the latest week, according to a Wall Street Journal survey of analysts. That would be below the five-year average injection of 52 Bcf and narrow the inventory surplus to 136 Bcf from 160 Bcf the previous week.

Commodities

US Power Update: Prices Mostly Higher, 5 Regions Post $100-Plus Spikes

US wholesale electricity prices were mostly higher Wednesday afternoon, with five regions seeing intraday price spikes above $100 per megawatt-hour, according to data from GridStatus.io.Electric Reliability Council of Texas' real-time locational marginal price stood at $31.13/MWh at 4 p.m. ET. Net load was 51.17 gigawatts, with natural gas making up the largest share of the generation mix at 45%.California Independent System Operator's real-time LMP stood at $36.72/MWh at 4 p.m. ET. Net load was 19.04 GW, with gas providing the largest share of the generation mix at 42%. Prices climbed to an intraday high of $105.97/MWh at 10 a.m. ET.Southwest Power Pool's real-time LMP came in at $32.72/MWh at 4 p.m. ET. Net load was 45.37 GW, with solar representing the largest share of the generation mix at 46%.PJM Interconnection's real-time LMP was $73.17/MWh at 4 p.m. ET. Net load reached 122.06 GW, while natural gas supplied the largest share of the generation mix at 42.7%. Prices rose to an intraday high of $271.12/MWh at 2:20 p.m. ET.Midcontinent Independent System Operator's real-time LMP was $43.18/MWh at 4 p.m. ET. Net load totaled 86.6 GW, with natural gas contributing the largest share of the generation mix at 33.3%. Prices reached an intraday high of $155.40/MWh at 2:35 p.m. ET.New York Independent System Operator's real-time LMP came to $59.20/MWh at 4 p.m. ET. Net load stood at 21.36 GW, while dual fuel held the largest share of the generation mix at 32.8%. Prices hit an intraday high of $283.69/MWh at 10:10 a.m. ET.ISO New England's real-time LMP reached $139.12/MWh at 4 p.m. ET, also the intraday high. Net load was 14.47 GW, with natural gas accounting for the biggest portion of the generation mix at 52.4%.Independent Electricity System Operator's real-time LMP was $37.54/MWh at 4 p.m. ET. Net load totaled 16.87 GW at 3:55 p.m. ET, with nuclear supplying the largest share of the generation mix at 39.4%.The National Weather Service's Climate Prediction Center forecasts above-normal temperatures across much of the western, southern, and eastern US from Sep. 17 to Sep. 23, with below-normal to near-normal readings across parts of the northern US.Meanwhile, the US is expected to see record electricity consumption as data centers and manufacturing drive demand through 2027, according to the Energy Information Administration's September Short-Term Energy Outlook released Wednesday.Sales are expected to increase nearly 2% to 4,135 billion kilowatt-hours in 2026 and another almost 2% to 4,211 billion kWh in 2027, according to STEO estimates.Commercial electricity sales should grow 3.3% in 2026 and 2.7% in 2027, representing 63% and 56% of annual sales growth, while industrial sales should rise 1.6% and 2.6%, according to the EIA's STEO.